Tag Archives: Greece public sector

Memorandum II: The sequel – Dude, where’s my state?

Illustration by Manos Symeonakis

As Greece draws breath after voting for a new package of austerity measures likely to pave the way for another loan agreement with the European Union and the International Monetary Fund, this might be an opportune moment to identify one of the key faults with the first memorandum signed last year. Because, like a Hollywood sequel which follows a dire original, Memorandum II is likely to make us want to look away in horror.

There is plenty in the medium-term fiscal plan, or MTFP as it’s known in sequel speak, about reducing public spending. Greece plans to save more than 14 billion euros by 2015. This means, among other things, that the public sector wage bill will be cut by 770 million euros this year, 600 millon in 2012, 448 million in 2013, 300 million in 2014 and 71 million in 2015.

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Got the message?

Illustration by Manos Symeonakis

Brothers and sisters, fear not. Our troubles may be at an end. We no longer need to live under the yoke of those who seek to demean us, for I have seen the light – a vision of a world where we, the oppressed people, can reclaim our streets, our public transport system, our gas stations, our ports and our post offices. Yes, our post offices.

Perhaps it’s no coincidence I should receive this vital message last week while trying to collect a registered letter sent to a company I formed with a colleague. The post office clerk glanced back and forth between my passport and the official note left by the postman, which states that just a form of ID is needed to pick up the letter, before informing me that the rules were different for companies. She dug out from a dusty folder the decalogue of registered mail and told me that I would normally need a first instance court document from when the company was formed, which details the names of the firm’s legal representatives.

This is the kind of paper you keep locked away after setting up a company and only bring out for really important things, like opening a bank account or drawing up a contract with another company. So, I politely expressed surprise that such a precious document would be needed simply to collect a letter. In its place, I offered our company stamp, which also has the names of the legal representatives and our tax number. Ruffled by my temerity, the woman looked at me with a sardonic smile and said: “You know, I could choose not to get this letter for you.”

In a sense, she was perfectly right. She had the choice of adhering to the rules and sending me home empty-handed or of recognizing the flaws in the system and being a little flexible so I, and others like me, could get served. But, in fact, these were not the actual options I was being presented with. The clerk was actually telling me that the decision of whether to hand over the letter or not lay solely within her personal realm of authority. She was essentially saying: “If you are nice to me” or “If you beg for forgiveness” or “If you make up some sob story” or “If I feel like it” or, even – god forbid – “If you slip some cash across the counter,” “then, I’ll cooperate.”

“Fine, don’t get the letter for me,” I replied. “OK, I won’t. You can try convincing the manager to give it you,” she said, pointing to a man I had noticed earlier sitting at an empty desk, sticking stamps on odd-shaped packages while talking about soccer with a teenage employee. In years gone by, I might have tried my luck with this man, a fine example of why despite already having 12,500 employees, Hellenic Post (ELTA) is being pressured by unionists to hire another 3,000. It was at this point I had my moment of clarity and turned my back on the clerk and her boss. It dawned on me that those of us who for years have been caught up in this warped web, spun by bureaucrats and politicians shorn of any morals or decency, no longer have to put up with this treatment. The tables are turning and, if needed, we can make them turn a little faster.

Illustrations by Manos Symeonakis

An online census of civil servants was completed last week, giving the Greek government the first ever accurate picture of how many people it’s employing. The total was just over 768,000 but that doesn’t include those employed at public companies and in the wider public sector. A separate census will take place for them next month. The figures available so far mean that in a working population of 4.4 million, almost one in five is a civil servant. Proportionally, it’s as high as anywhere in the European Union and almost double the German figures. But the numbers also remind us of something else: that these people — who in some cases do a difficult job under testing circumstances but in too many cases are feckless loafers – are a minority. We, the people who pay their wages and put up with their antics, are the majority.

The public spending cuts and reforms prompted by the economic crisis are an opportunity to recalibrate our relationship with civil servants and people in closed professions or other sectors that have benefited from politically driven preferential treatment. Those who’ve been pampered and fawned over or who possess jobs as a result of political patronage are beginning to feel the pressure that others have to deal with daily. Wage cuts, job insecurity, professional competition and meager pensions are now a reality for them. The urgency of reining in the public sector and liberalizing closed shops is also helping snip away at the umbilical cord between these groups and the political parties – they are no longer useful to one another. Maybe the evaporation of these privileges will concentrate their minds on doing their job properly. Maybe it will force those who carved out cloistered existences for themselves to realize they are part of a wider society.

If they choose instead to cling on, then we – the majority that has suffered from this debased system – can have a go at shaking them loose: When they choose to close down the city center, we can ensure they find us there before them; if they stop our trains, we can get on board and run them ourselves; if they shut our gas stations, we can stop them from getting fuel when they need it; if they block access to our ferries, we can go to their homes and prevent them from leaving for their holidays; if they don’t deliver our letters, we can use couriers or e-mail instead; and if they refuse to do their jobs, we can report them to a government that lately seems very keen to investigate wrongdoing in the public sector.

They may argue that we are being harsh, that they too are victims of a corrupt system. But we have been ill-served by them too long, seen too many of our friends, relatives and colleagues lose jobs unjustly and spent too many nights worrying about our futures to have any sympathy left. Once Greece belonged to them but now it belongs to us. I have seen the light.

This commentary was written by Nick Malkoutzis and was published in Athens Plus on August 6, 2010.

No sleep till Athens

Illustration by Manos Symeonakis

There isn’t much to laugh about in Greece at the moment. So, it was with great pleasure that I read an e-mail last week from one of our readers in the USA in which he suggested how Greece could overcome its economic problems. One of his ideas was that Greeks should stop taking lunchtime siestas because they lose valuable working time. It was the first time I laughed out loud for weeks. I don’t know any Greeks under the age of 65 that take a nap at lunchtime, apart perhaps from my son. But he’s only 20 months old, so perhaps he can be forgiven for not using these hours to contribute to the country’s gross domestic product.

Although the e-mail from America provided a moment of light relief, it left a bittersweet taste because it also underlined how the crisis has created a negative stereotype of Greeks. It is patently obvious that many Europeans, especially Germans, are convinced Greece is full of freeloading slackers. The reality, though, is different. For instance, Eurostat’s figures for the average working hours in Europe for 2009 indicate that Greeks work an average of 42 hours a week. The EU average was 40.3 hours and in Germany it was 40.8. In fact, the Greek figure is the highest in all of the 27 EU countries.

So, if the Greeks work so hard why is their country in such a mess? Well, one answer is that working long hours does not necessarily mean you are productive. In fact, in Greece you often end up working longer because of the inefficiencies of the system. The time you could be using productively may be spent queuing at a public service to get paperwork stamped or writing out invoices by hand because there is no computerized accounting system.

Of course, there are very clear economic and financial reasons for Greece’s collapse but the causes of the illness go much deeper. One of the most serious underlying problems is a bloated and decaying public sector which neglects to punish inefficiency and indifference. Until 2007, according to World Bank data, it took 38 days to set up a business in Greece. In Djibouti it was 37 days. Of course, what statistics cannot measure is the frustration that causes so many people to lose the will to fight the system and eventually play by its warped rules, even if this involves corrupt practices. And what sustains this vicious circle? Political expediency. Governments created this monster and were afraid to tackle it because their support base, and therefore their destinies, were tied not just to the public sector but to the array of professions that are interlinked with it, such as doctors, civil engineers, lawyers, notaries and farmers.

Whatever you do in Greece, you cannot avoid dealing with the state and coming up against its inertia. According to Eurostat, roughly one in 10 Greek adults is a civil servant, which is the highest proportion anywhere in the EU. This is a legacy of the 1980s, when the governments of Andreas Papandreou’s socialist PASOK sought to balance years of right-wing rule and dictatorship by finding jobs for the party faithful. Since then, each government has treated the civil service as just another party apparatus, hiring more people even when the country couldn’t afford it.

But, again, the story of the Greek public sector is a symptom of the problem rather than the root cause, which lies in the country’s political system. Since the 1970s, Greece has been ruled by two parties that helped themselves rather than the country. They awarded their friends jobs or state contracts and as soon as any social group or sections of the media resisted an attempt to change the status quo, they would cave in and abandon the offending policy. So, it’s no surprise that an opinion poll by GPO for Mega TV this week indicated that 54.3 percent of Greeks believe all the recent governments, rather than a specific one, are responsible for the current crisis.

The previous New Democracy government of Costas Karamanlis is blamed by 20 percent of those questioned. Karamanlis and his ministers have a lot to answer for. At a crucial time for the global economy and despite having a comfortable majority in his first term, Karamanlis dodged any attempt at structural reform. Instead, he handed over questionable statistics, a spiraling deficit and no new ideas.

But the current PASOK government is not without blame. As assured as Prime Minister George Papandreou may look on the international stage now, he had no idea how to be a constructive opposition leader for the previous five years. In fact, the period from 2004 to 2009 will go down as a barren time in Greek politics, when no party could come up with a vision for Greece. The leftist parties — the Communists (KKE) and the SYRIZA coalition — were content to simply battle for control of the unions. This fight is continuing and, as the crisis puts the unions in the spotlight, it is clear they have failed to overcome their esoteric attitude. Even now, they have not been able to refine their tactics beyond that of blackmail — if the government does something they don’t like, they block ministry entrances or central Athens.

So, when people ask “Why did Greece end up in this mess?” perhaps the best answer is that it would have been a miracle if it hadn’t done so. It’s only now that Greeks are beginning to realize the damage that has been done to the country over the last decades and that, as voters, they actively encouraged it. They were happy to turn a blind eye as PASOK exploited the public sector in the 1980s; they were equally oblivious to the failures of socialist and conservative governments in the 1990s, when money from the EU began to flow into Greece; and during the last decade, when entry into the euro secured cheap loans and a comfortable way of life, nobody wanted to ask any difficult questions.

The realization is a painful one for Greeks — it’s like thinking you have entertained a friend by taking him out for a few drinks only to find out that you actually fed his alcoholism.

The recovery from this crisis will not just depend on the emergency loans from the IMF, Germany and the other eurozone countries. It will not depend just on growth rates and bond spreads. It will, to a great extent, depend on whether Greeks are now prepared to take the extra step to demand better of their public sector, push for the private sector to be allowed to flourish and, above all, be ruthless with incompetent and cowardly politicians. To do all this when your salary is shrinking, your taxes are increasing and your livelihood is at risk is not an easy task. For all these reasons, Americans, Germans and everybody else should know that Greeks will not be sleeping well at night for many years to come, let alone taking lunchtime siestas.

This commentary was written by Nick Malkoutzis and appeared in Athens Plus on May 7.

That sinking feeling

Illustration by Manos Symeonakis

A few weeks ago, when the economic crisis was still a novelty, Finance Minister Giorgos Papconstantinou inadvertently filled us with fear when he likened the Greek economy to the Titanic. But there was an attempt last Friday to dispel those terrifying mental images of our good ship being swallowed up by a sea of debt and its passengers hurtling towards financial destruction, when Prime Minister George Papandreou chose his visit to the far-flung Dodecanese island of Kastelorizo as the right moment to announce that Greece was formally requesting outside help.

As Papandreou spoke, the sun shone in the background, the sea glimmered and the white island houses beamed brilliantly. This was an ingenious way to dress up bad news. The message was clear: Greece’s economy is not at all like the Titanic, steaming toward a deadly iceberg. In fact, it is like the Love Boat, destined to float around quaint destinations aimlessly, and if it ever runs into any trouble, a friendly tugboat will soon come along to help it to safety.

Everything about the setting radiated calm, which is in short supply in Greece at the moment. Nevertheless, it puzzled many Greeks that a speech of such national importance, which would normally have been made in Athens, was being delivered almost 600 kilometers from the capital. For foreign observers, the subliminal message being broadcast from across the Aegean Sea was obvious.

“No wonder George Papandreou picked the exquisite Aegean island of Kastelorizo for his live broadcast last Friday, when he finally called on the world for emergency help,” wrote Bronwen Maddox in The Times daily. “The backdrop was the best advertisement that the prime minister could have found for Greece’s assets. It’s also a long way from the protests and strikes against austerity measures that are rocking Athens and other cities.”

The Financial Times’s Kerin Hope reported on how two ministers had apparently convinced Papandreou to deliver his speech “outside, in a stunning setting that would partly offset his gloomy message.”

If one of the purposes of Papandreou’s mis-en-scene was to assure foreigners that Greece was still open for desperately needed business, then it seems to have worked. The images of a sun-baked island coupled with talk of an economic crisis sent the writers at Britain’s conservative Daily Mail into a spin. “Holiday prices set to fall in Greece as country battles financial meltdown,” the newspaper informed its readers with glee.

For Greeks, though, the message implied in the dreamy backdrop was not as clear. Responses ranged from those that felt it was a sneaky political stunt designed to avoid a public backlash in Athens, to others who interpreted it as a symbolic gesture aimed at showing the diversity and richness of Greece — resources that will have to be tapped into if the country is going to survive the crisis.

The mixed domestic response perhaps reflects the underlying confusion in the way the message was conveyed. Papandreou spoke of “a new Odyssey” for Greece but did so from an island whose best years lie in the past — more than 100 years in the past — when it hosted the country’s most significant shipping fleets. Now, Kastelorizo is home to a dwindling population of some 400 people, who rely on nearby Turkey for many of their supplies. The message seemed to be that Greece was embarking on this “new Odyssey” without any new ideas or impetus.

“We are on a difficult course but we have charted the waters and we will reach Ithaca safely,” said Papandreou in reference to Odysseus’s legendary journey from Troy to his homeland. As was pointed out soon afterwards, Odysseus took 10 years to reach Ithaca and by the time he got there all his traveling companions had died. Dipping into Greece’s ancient past, Papandreou failed to come up with an inspiring message for the country’s future.

The mixed messages in his speech were symptomatic of a leader, a government, a country that is in a state of confusion. Papandreou talks about ignoring the bond spreads when it’s those very figures that are driving Greece into the arms of the IMF. His finance minister is negotiating salary cuts with the fund’s representatives, even in the private sector, at the same time as the labor minister is stating publicly that PASOK would never accept such a thing.

This bewilderment is reflected in the actions of common Greeks as well. “Hire more people, don’t cut wages,” demands one group, as another damages tourism, one of Greece’s economic pillars, by blocking a cruiseliner at Piraeus port. Then, the same day the Cabinet discussed an overhaul of local government that would save 1.8 billion euros of public money every year, crossing guards — people who are employed for a couple of hours every day — staged a protest to demand permanent jobs in the public sector.

The sun may have shone when Papandreou delivered his speech but many Greeks remain in the dark, confused about where the country is going. Hearing about a “new Odyssey” only compounds this because the journey Greece has embarked on is not a new one at all: pension reform, trimming the public sector, liberalizing closed professions and clamping down on tax dodgers — these were all things that were meant to have been done over the last three decades. We have set out on this Odyssey many times before, only to return before we had even left port.

It is only now that bleary-eyed Greeks, woken from years of sleepwalking, are beginning to realize that these issues remain untouched, and that as voters they must accept a huge share of the responsibility for this. Now, these reforms, and others, will have to be carried out under the watchful eye of outsiders. And in this sense, Kastelorizo was a good choice — at various times it has been occupied by the Crusaders, the Neapolitans, the Ottomans, the Venetians, the Italians, the French and the British.

The IMF with the backing of the European Commission is the one that will chart Greece’s course for the next few years, not Papandreou or his government. During that time, Greeks will have to emerge from their state of confusion and brace for the treacherous waves ahead — perhaps they will consider Papandreou’s words, not those spoken in Kastelorizo but a slogan he came up with during last year’s election campaign, which seems so prophetic now: “Either we change or we sink.”

This commentary was written by Nick Malkoutzis and appeared in Athens Plus on April 30.